May 10. 1915. 



HARDWOOD RECORD 



15 



Statistics and Accounts 



Under the above headiug J. W. Kaye of Wcstboro, Wis., discussed 

 in a very able paper a question that is vital to manufacturers and 

 one which led to considerable discussion. Among other things the 

 report gave a number of recommendations for changes in the 

 methods of gathering information on these subjects, which recom- 

 meudations follow: 



1. These statistics are now being gathered directly through the secre- 

 tary's office an(i it is recommended that this practice lie continued, but that 

 ail of the forms now u.sed be submitted to this bureau for revision. 



2. That the secretary furnish this bureau witli the names of members who 

 fail to report saies for any four consecutive numbers of tlie Bulletin so that 

 we can endeavor to impress upon them through the member of the bureau 

 nearest to the delinquent member the necessity of malting these reports. 



3. In view of tlie fact that the members of tliis l>urcau are widely sepa- 

 rated, I wili apportion to each member of the bureau a list of members in his 

 territory, thus forming live groups, with the idea that each member of this 

 bureau will lieep in toucli with the members in his group, calling them 

 together for special meetings to consider matters of accounting, etc.. If 

 thought advisable. 



4. As there has always existed a feeling of uncertainty on the part of 

 some of the members as to whether all members fuliy understand the liind of 

 shipments, by rail and water, which must be reported as required by the 

 constitution (stoclis used in the members' own flooring plants Ijeing ex- 

 cepted), it is suggested that the quarterly report of "cut and shipments" 

 be made more specifle and tliat these reports be carefully reviewed by this 

 bureau by districts, so that we will be in a position first to assure the 

 directors that ail members are reporting and paying dues on an equal 

 basis, and, second, to correct any misunderstandings as to the shipments 

 subject to dues. 



5. That this bureau send a circular letter to each member, with blanks 

 to be filled out in June and December by their traveling salesmen, giving 

 their best judgment as to the amount of stock held by each retailer and 

 each manufacturing consumer, these reports to cover all territory in which 

 Wisconsin and upper Michigan lumber is sold and to be sent to the secre- 

 tary's oflice and compiled by him, and the entire transaction to be consid- 

 ered strictly confidential. The reports are to be by towns instead of indi- 

 vidual dealers. In the assembling of these figures by the secretary the 

 statistics are to be given out by states only, and no member of the asso- 

 ciation is to have access to the actual reports. 



6. In like manner it is proposed to have a semi-annual report of wages 

 paid by members to workmen, these reports not to have the names of the 

 individual companies, but to be averaged for each of the five districts above 

 mentioned. 



7. It is recommended that this bureau shall collect annually the following 

 statistical information as to manufacture and cost from each member of this 

 association : 



CONFIDEXTIiL COST REPORT 



1. Name of firm. 



2. Annual capacity of mill. 



3. Amount of standing timber owned (estimated feet board measure). 



4. Scale of stumpage charges used. 



5. Fixed capital in manufacturing plant and main line on railroad. 



6. Average total amount of fixed and working capital used in the manu- 

 facture of lumber, excluding timber. 



7. Amount of each kind of lumber produced for the preceding fiscal year. 

 S. And the following cost items in the form of report from each member : 

 Carrying Charges on Timber. Instead of each member reporting his 



actual taxes and his actual interest paid in carrying his timber, it is pro- 

 posed that after these reports are received from all members, it will be 

 possible to determine the average amount of timber held by the members of 

 the association. This average amount of timber, in feet — board measure — 

 divided by the average annual cut, will give the average number of years that 

 the members have to operate. It will be supposed that a fair charge to 

 lumber consists of 4 per cent Interest, 1 per cent taxes and 1 per cent carry- 

 ing charge, making G per cent on the total amount of timber. This per cent 

 multiplied by the average number of years will give the percentage of the 

 carrying charges to the annual stumpage cut — for instance, if the average is 

 eight years the annual carrying charge would be 4S per cent of the average 

 stumpage price. 



Total cost of Logging, including all expense from stump to f. 0. b. cars 

 main line ; all maintenance and repairs for logging equipment, roads and 

 spurs. 



Freight on Logs to Mill. This includes the main line railroad operation 

 owned by the member as well as the actual freight paid common carrier. 



Total Cost of Logs at Mill. This is the average cost of the company's own 

 logs, including stumpage and purchased logs. 



Merchantable Lumber Cost of Logs. 



Cull Lumber Cost of Logs. 



If the merchantable lumber overruns the log scale the merchantable cost is 

 proportionately less than the log cost and there is no charge for the cull 

 lumber cost. If the merchantable lumber scale underruns the log scale the 

 merchantable cost is the same as the log cost and the cull lumber cost Is the 

 underrun percentage of the log cost. 



Cost of Manufacturing Lumber. This includes all expenses from cars at 

 mill to lumber in pile, including physical depreciation, maintenance and 

 repairs. 



Shipping. Including all maintenance and expenses from lumber in pile 

 to lumber on cars. 



Sales Expense. Including sales office, salesmen, commissions and adver- 

 tising. 



General ISxpense. Including officers' salaries, insurance, taxes on mill 

 property and all extraordinary expenses. 



Interest. This item will be computed at per cent on the average fixed 

 and working capital reported by the members divided by the number of thou- 

 sand feet produced. If this average is $15 per thousand of annual cut the 

 interest cost a thousand would be ijO cents. 



Amortization. This item will be determined from the general averages 

 for standing timber as compared with mill property, on the assumption that 

 when the timber is gone the mill property will be of no value. This charge 

 will be determined by the bureau from the general averages of the reports. 



Discounts and Deductions. This item includes the amount of discounts 

 for prompt payment ; deductions on account of complaints and actual losses 

 sustained during the year. 



All of the above items of cost are to be figured a thousand feet on total 

 year's cut — merchantable and cull. 



Realization. As nearly as can be determined by actual sales and inven- 

 tory by grades with proper allowance made for the amount of lower grades 

 developing in the higher grade piles, each member should report the per- 

 centage of Nos, 1, 2 and .'J hemlock or the percentages of merchantable and 

 No. 3, and the proportion of FAS and Nos. 1, 2 and 3 for each kind of hard- 

 wood, and the average price obtained for merchantable and cull in each wood. 



Each member's report, as al)ove, will — if he desires — be considered confi- 

 dential and each member reporting as above will receive from this bureau a 

 carefully compiled differential cost sheet using standard figures for stumpage, 

 carrying charges, interest and amortization of plant showing his actual cost 

 for each kind of wood in merchantable and cull carried out with this 

 standard. 



The only shape in which any of these reports will be presented to the asso- 

 ciation will be without name or any numerical designation for individual 

 reports. 



9. In view of the fact that the chief source of expense to members of our 

 association is connected with their logging operation, on which subject we 

 have less definite Information than almost any other, it is suggested that this 

 bureau solicit some member of the association to prepare a paper for the 

 annual meeting on the relation between logging specifications and manufac- 

 turing costs, and that Howard F. Weiss, of the Forest Products Laboratory, 

 be invited to conduct experiments along this line at some of the mills of our 

 association, and that if thought advisable the association be circularized to 

 obtain the experience of the members on this question. 



10. Planing Mill Charges. At some time during the year it is thought 

 advisable that a discussion of planing mill charges be had with a view of 

 making these charges uniform throughout the association. 



11. Standard Forms. It is proposed that the chairman of this bureau 

 shall keep a collection of standard forms of accounting that may, from time 

 to time, be sent him by the members, with the idea that this collection may 

 be loaned to any member, at any time, desiring to look through the forms for 

 the purpose of making use of same in his accounting system. 



The chair appointed as a committee on resolutions J. T. Phillips, 



A. L. Osborn and H. W. Moore. 



Advertising 



M. P. McCullough, chairman of the advertising committee, presided 

 during the discussion on the question of association advertising. 



The chief topic under this head was the question of broader pub- 

 licity for birch. There seems to have been some little encroachment 

 on the uses of this wood on the part of other woods that have 

 entered into active. competition with it. The situation birch manu- 

 facturers are facing has apparently come in for serious thought. A 

 broader campaign, wliich will necessarily increase the assessment, in 

 keeping witli the importance of the course was recommended. George 

 H. Champan substantiated Mr. McCullough "s claims and spoke along 

 the same lines. 



In commenting on the possibilities in this direction, W. T. Chris- 

 tine expressed himself as believing the time has come for the in- 

 auguration of a campaign to educate the people to new uses for 

 birch rather than simply covering the old fields as heretofore. 



E. S. Kellogg, secretary of the National Lumber Manufacturers' 

 Association, reviewed the rapid progress the National Lumber Man- 

 ufacturers' Credit Corjioration, publisher of the Blue Book, has made. 

 He also told of the excellent success the Interinsurance Exchange has 

 experienced, saying it started out with $6.50,000 in risks but has since 

 raised this amount to $1,500,000. He said the exchange has written 

 more business in the last two months than any other interinsurance 

 concern has written in a year. 



Ou the question of lumber publicity Mr. Kellogg expressed him- 

 self in no unmistakable terms, reviewing the present results obtained 

 by manufacturers of competitive products, and outlined various ways 



